Article #014

5 Main Reasons Why New Ecommerce Businesses Fail So Quickly

As you probably know, 90% of startups fail. E-commerce are not the exception. Here is a deep analysis of the top 5 reasons why e-commerce businesses fail, and a solution to them.

eCommerce Failure

Here’s a fun (but sobering) fact: recent research shows that around 90% of new startups fail. That’s a lot. If you’re starting your own online business, or you already run one, that fact might send a shiver down your spine.

But fear not! While you can learn a lot from a successful business, you can learn a whole lot more from a failed one. I’ve done some digging and highlighted the top 5 reasons why ecommerce businesses fail, so you can avoid those mistakes and get your business in that successful 10%.

Devaluing your brand with poor content

You’ve got a great product. You’re proud of it. You’ve done your market research, you know your stuff… but your product listing is a grainy photo with some poorly written copy. It looks like something you’d see on eBay or a dodgy Amazon vendor’s site, not a successful ecommerce business. You have to be mindful that the eyes of the world are on you — and there is no excuse for poor English (hello, Grammarly). Make sure that you don’t make a subpar impression and devalue your brand because of a sloppy launch.

The first taste is with the eyes, that’s what my grandma always says. And she’s right! If your product image looks like something taken on a camera phone from 2005 by a ten year old, your customer won’t be impressed. Take the time to teach yourself how to take good product photos to really dazzle your audience.

And you shouldn’t just dazzle them with pictures either. Your product description needs to clearly describe your item, but at the same time be engaging enough to have it resonate with your audience. Use bullet points to list the benefits of your goods in a positive light, like Amazon have done for their Kindle Paperwhite:

eCommerce Poor Content

Clear advantages to the customer are blended with product specifications, all in an easy-to-read format. Sometimes simplicity trumps complex, flowery language. Think about how your UI affects customer experience.

Losing customer trust and wasting their time

So, you want to buy this summer dress? Great! Just click Add To Basket. Now click on Checkout. Now choose your delivery option. Then enter your home address, your partner’s home address, your hopes and dreams and a 1000-word essay on your family history since they arrived on the Mayflower...

Okay, so I’m exaggerating a little. But while it might seem obvious, but there are still lots of ecommerce businesses who neglect to make their checkout process as simple as possible — to their detriment. In fact, it has been described as the number one reason why consumers abandon their shopping cart before paying. Ensuring that your checkout procedure is as simple and painless as possible stops customers dropping out of your marketing funnel at the last minute. It’s a simple change that is worth getting right.

You should also think about employing checkout trust signals. Consumers can be sceptical of brand new websites and unkwond brands, so partner with some well-known payment facilitators (PayFacs) to reassure. The number one goal here is repeat business, so capture the data that you need, give the customer a great experience, and let them get on with their day.

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Not aligning your pricing and ads

I saw a great deal on a blender the other day. In fact, it was a steal. But when I got to the checkout, I found out the postage and packaging was almost a third of the product cost itself! So I decided not to buy. That meant no sale for the seller, and no fruit smoothie for me in the morning. If I had known beforehand the full price including P&P, I might have been more easily swayed…

The fact is, you need to manage your customer’s expectations. Hidden fees are a big contributor to cart abandonment. Ensuring that what your consumer sees is what they get is crucial, so don’t hide any sudden costs until the last minute. There are lots of free or relatively cheap shipping calculator widgets out there, so be sure to include one in your store.

Same goes for misleading ads — you will undo all your hard work if you send the consumer to an offer or a landing page that isn’t aligned with the ad they clicked. Never play around with your customers’ trust like that — it won’t end well for you.

Ignoring the importance of mobile UX

It’s your cousin’s birthday tomorrow, and you forgot to get them something. But you’re too busy to go into a store, and you’re traveling all day today. But it’s okay! You can just order it on your mobile. But that website that worked great on your computer at home doesn’t translate so well to your mobile device...so you’ll just go to a site that does.

62% of smartphone users have purchased something on their mobile device in the last 6 months. With figures like that, the emphasis on creating a responsive ecommerce store that works across all devices is vital. Thankfully, the tech to help get you there is relatively easy these days — there are no excuses for a poor mobile experience in 2018.

Get to know the nuts and bolts of what good mobile UX looks like for your store. Using Shopify's store builder means that you automatically get a store that’s optimized for mobile devices, whereas anyone working with a more custom system like Drupal may have to put in some extra development time to get things just right. If you have gone with a shopping app as well, make sure that it’s been robustly tested before the big launch.

Either way, it’s worth taking the time to test your store yourself on a variety of devices, from laptops to tablets — with differing web speeds, and from different locations and IP addresses around the world. If a customer finds your site difficult to navigate, it’s easy for them to just go elsewhere. It’s up to you to make sure they don’t need to.

Having a lacklustre marketing strategy

It’s a hot, sunny day, and you’ve made the perfect lemonade. It’s the perfect sparkling solution for a warm summer’s day. But you’re selling it on an empty street and no-one knows you’re there. That’s why you need to ramp up your online marketing strategy. Your plan should include paid, owned and earned media, and consist of useful and relevant content.

Think about your audience. Who are they? What do they want from your brand? What social media platforms do they use? These are all questions you need to keep in mind when you are formulating your marketing strategy.

Even the smallest of startups will need to invest in paid media at some point. Social ads are a great way of driving traffic to your online store and are relatively cheap compared with other forms of paid advertisements. With an estimated 1.39 billion active Facebook users every month, social ads are the cornerstone of a successful online business.

eCommerce Failure Facebook

Juicero. Yik Yak. Beepi. Don’t let your online business go the way of these startups. Learn from the mistakes of others. Simple things like optimizing your site for mobile devices and making your checkout process quick and easy can be the difference between bombing and succeeding. Do your research and create an outstanding marketing strategy that will wow your prospective customers.

Victoria Greene

Victoria Greene is a branding consultant and freelance writer. Want the latest news from the world of ecommerce, marketing, and design? Check out her blog, Victoria Ecommerce for all the current developments. Victoria has a drive for helping store owners get the best return on their ecommerce businesses.

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